S&P
Post-market Wrap (recording & summary)
Thursday’s gap down remained in negative territory throughout the day. The session probed under the prior session’s low. It would have been more pessimistic to actually close under the prior low, so Thursday’s session was “ineffectual pessimism.”
This tends to resolve in one of two ways. A bearish resolution would gap down for a delayed confirmation of what originally had been ineffectual. The bullish resolution would gap up and trend higher, however durable or temporary that might be. Since no traction was gained Thursday, trending at all Friday morning must begin by gapping beyond Thursday’s range anyway.
The only “unfinished business” left outstanding is below at 2167.25. Testing it overnight could be recovered before the open, but Wednesday morning’s Pivot Reversal already makes a Friday morning recovery unlikely. So, Friday’s two likeliest scenarios are either gapping down and trending lower into the weekend, or else a weak rally effort that fails, and reverses down through the afternoon.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot…
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Sep Contract (EC, ETF: (FXE, UUP))
Tuesday’s retest of Friday’s 1.1215 spike high had held, but was still likely to test 1.1300 before reversing back down. And 1.1300 was probed Thursday up to 1.1330 in reaction to ECB news, before reversing back down into negative territory under 1.1255. That only filled the gap back to Wednesday’s close, but back under 1.1225 should trigger a much deeper drop.
Gold Dec Contract (GC, ETF: (GLD))
.Simply closing negative Wednesday had signaled the bounce had ended. Closing under 1343.00 would signal momentum reversing down. Presumably, the decline targeting 1296.00-1297.00 has been reinstated, albeit not necessarily in a straight, uninterrupted path.
Silver Dec Contract (SI, ETF: (SLV))
Thursday morning resumed sliding gradually to break under the 19.85 pullback limit that was still being tested at Wednesday’s close, and then to extend under the 19.75 sell signal.
30-year Treasury Dec Contract (US, ETF: (TLT))
There was no bullish reason to dip any deeper Thursday after Wednesday’s false break above 171-02 had already filled the gap back down to Tuesday’s 170-21 close. But Friday’s open gapped down to and through the 170-00 sell signal and extended down sharply to 168-12, proving that support had been chipped away. Holding 168-22 as resistance would allow this leg to extend down to 167-28.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s post-close surge to 45.80 resistance could have served by proxy for retesting Sunday night’s 46.53 high, but it was thoroughly retested overnight anyway. And that greeted Thursday morning’s delayed EIA report, which pushed price much higher to test 47.55. Closing back under 46.15 would start to signal momentum reversing down
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
A couple of factors had suggested the 4th-day reaction of the four-day sequence was only delayed, and that Thursday would behave bullishly to compensate. In fact, the open gapped up above 2.71 and extended intraday to 2.82, needing only to close above 2.74 to signal momentum reversing up.
Look ahead: Economic Calendar – for Fri Sep 9, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports are scheduled Friday. The pre-open Fed speaker is too early to impact intraday price action. The midday rig count could be more influential than normal due to this week’s big back-to-back surprises in API and EIA data.
Eric Rosengren Speaks
7:45 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Mid-day Update… Last last gasp?
Rejecting yesterday afternoon’s bounce now awaiting a repeat.
This morning’s 2167.25 bias-down target has become “unfinished business below.” The bias-down signal was no more productive after triggering at 10:15 than before it. So, invalidating the bias-down signal required recovering the 2180.50 bias-up signal as the bias environment was lapsing. And the morning’s bounce only reached 2177.25.
Recovering 2176.75 would still start to signal momentum reversing up. The morning’s bias environment only pierced it by a tick. And now this morning’s 2173.25 bias-down signal is being retested. It’s not exactly giving way, but yesterday’s 2170.50 low has been tested enough that even obligatory support is unlikely.
I’m tracking the timing of a next downleg, assuming there is one. Recall that yesterday afternoon bounced throughout, and its rejection was delayed until pre-open. Rejecting this morning’s bounce this afternoon would suggest the market is becoming more pessimistic. The depth and slope of its downlegs would be likely to increase simultaneously.
If only retesting yesterday’s low was sufficient to end selling pressure, then this morning’s bias-down signal shouldn’t have triggered. At least its target should have been rejected. But while a delayed recovery wouldn’t be sponsored by strong hands, it could still be a substantial detour, so be sure not to get caught short on a big bounce.
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2186.00 | 2178.25 |
| …would target | 2191.50 | 2183.75 |
| Bias-down: under | 2180.00 | 2172.25 |
| …would target | 2175.00 | 2167.25 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 1:20 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 1:20 would invoke a grace period through 1:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.